Interest rates fall to a record low of 1%

THE European Central Bank cut its benchmarkinterest rate by 0.25% to a new record low of 1% at its monthly meting in Frankfurt yesterday.

The rate reductions mean a first-time buyer who took out a €250,000 standard variable rate mortgage in May 2008 will see their mortgage interest bill slashed by almost €166,000 over the life of their loans.

Those with a €200,000 mortgage are set to make savings of €365 a month, representing an annual saving of €4,380.